DProject: Let's see... I don't know about livestreaming but I'll try best and give you advice on the other stuff you asked.
First of all: It seems you'd be doing this just to get a fanbase / views. That is not the right way to go when making Let's Plays. The most important thing you'd want to do a Let's Play, is because you really like the game you're playing (or if you haven't played it before, it looks interesting enough to do a Let's Play of). Besides, if you're at the moment relatively unknown to audiences, chances are they won't give two sh*ts about your stream if they don't know you or your work. And if you haven't done Let's Plays before, you might not be entertaining / good enough player for the audiences to enjoy your Let's Play. That's why I would recommend that you start off by doing a Let's Play that isn't livestreamed. Work on your talkative skills, find out what kind of schedule you can keep when making the videos, experiment and find the best possible settings for your videos, etc. Then post the videos on YouTube or Vimeo, and with some luck you gather fans / subscribers that way. After a while, you might have a large enough fanbase to realistically consider livestreaming. Just remember, there are A LOT of people who do Let's Plays on the internet, which means it's not a given that you immediately gain fans by doing Let's Plays. The quality of your videos determines whether you get fans, but the truth is even then you might end up unseen. Just don't get your hopes up.
Then, settings. Like I said, I don't know much about livestreaming but I do know what works with regular Let's Plays (at least for me!). The programs you need are:
-Audio recording, Audacity works the best and it's free
-Video capture, I recommend Fraps
-Video editing software, I use Adobe Premiere but there are other options too, some might be free
-(optional) Audio editing (Audacity might work here) to remove noise from your audio if there's too much of it.
You also need:
-Tons of hard drive space; whenever I capture game footage, 40 minutes is about 90 gigabytes (because Fraps captures are uncompressed, like they should).
-A headset: The better your headset, less audio editing you need to do.
When you're about to start recording, open Audacity (no need to meddle with settings, unless the automatically selected soundcard isn't working and Audacity is not recording) and press record, then open Fraps (or whatever capture software you're using). Then open up the game, press F9 (default button on Fraps to record), and it should now capture both your voice, and the game footage. I recommend making a test video first, such as capturing just the menu screen and talking at the same time. Then look at the captured footage to see everything went fine. If the audio was too quiet (you talking), increase the mic volume. It's important to hear the voice of the Player, but the game audio should also be audible. You need to find the perfect balance.
Once you've found the right settings and have recorded your first actual game footage and the commentary track, you need to mix them and compress the whole thing. That's where video editing comes into play. Your project file should be the same dimensions as your game footage; in my case it's always 1280x1024, my screen resolution (although for YouTube this makes black borders for the videos but there's a workaround). Toss everything on the timeline, make sure the video and audio commentary are in sync (may need to cut some of the commentary), remove the unimportant stuff from the beginning and end, then get ready to export. Some might have a better suggestion for the export settings, but what I've found that works great while maintaining a bearable file size, is Windows Media (wmv). Export using the same resolution your game footage is in, choose a big enough bitrate (YouTube tops at 3000 I think), make sure the FPS is same as source (also, make sure nothing gets out of sync), and DON'T deinterlace the video. For audio settings there isn't many options; I use 192 kbps. If you see black borders on the output, make sure you've selected Square Pixels (1.0) on the video aspect.
Then export, and be ready to wait. For me it takes about 3 hours to export 40 mins worth of video with a two-pass encode, but that's because I haven't found a decent render. Once you've exported your video, watch it in order to see these things:
-Is the video fully in sync?
-Is the quality good? Does it look pixelated, is the audio too quiet, etc. Because if the quality is not great, then you should consider re-exporting with different settings.
-And perhaps most important of all: Is your video entertaining? Would you watch it? Because if you wouldn't watch it, chances are your audience will neither.
I'm still very new to this myself, but like I said, someone with better understanding may post about the codecs and stuff more. I just told about what has worked for me. If you should have any more questions, I'll gladly answer them. In the meantime, watch this video:
http://www.youtube.com/watch?v=My42gq3ejac and take it into heart. It offers really great advice.
Oh, and the YouTube workaround? When uploading, add this tag: yt:crop=16:9
It zooms in on the 16:9 area, and removes windowboxing). Of course, you only need to do this if there are black borders around your video on the YouTube player, and that happens if the resolution you captured your game footage, isn't widescreen (16:9).
Good luck with your LP career, remember, start small and don't expect to immediately gain a huge following; it happens if it's meant to be. Acknowledge that Let's Plays aren't just about playing, it's quite-not-so-hard work and time consuming. And you're doing this for an audience, which means you need to be entertaining and avoid dead air. I'm interested to see what kind of LP you come up with!
I love you for taking such time with this amazing post and in that case I should rather pick some good Hard drive....just capacity matters for this purpose right?
